President Uhuru Kenyatta and Chinese President Xi Jinping after signing a trade deal in Beijing on April 25, 2019. PHOTO | PSCU

In Summary

This as the current public debt has surpassed the mark set by the Public Finance Management Act which allows the government to borrow only up to 50 percent to the GDP ratio.

Parliament has now raised a red flag over the ballooning public debt occasioned by heavy borrowing with Emgwen MP Alex Kosgey proposing the amendment of the law to regulate government's borrowing, terming the current debt standing at Ksh. 5.6 trillion as excessive.

Listed public institutions such as State Broadcaster KBC now risk auction should the Kenyan government fail to meet its ballooning debt obligation.

The country’s current public debt has surpassed the mark set by the Public Finance Management Act which allows the government to borrow only up to 50 percent to the GDP ratio.

Parliament has now raised a red flag over the ballooning public debt occasioned by heavy borrowing with Emgwen MP Alex Kosgey proposing the amendment of the law to regulate government borrowing, terming the current debt standing at Ksh. 5.6 trillion as excessive.

The trip by President Uhuru Kenyatta and opposition leader Raila Odinga to Beijing, China, has not made matters any easier as it has left tongues wagging with Kenyans staring at another possible loan of up to Ksh.368 billion to extend the Standard Gauge Railway (SGR) from Naivasha to Kisumu.

But, appearing before the National Assembly’s Budget Committee, Mr. Kosgey presented a proposal to have government borrowing regulated and capped at Ksh.6 trillion.

“We cannot allow this situation whereby the Treasury or the Presidency or anyone can just decide today that they want to borrow this much yet we have already overburdened the common mwananchi,” said Sigowet Soin MP Kipsengeret Koros.

“Let us be careful that we don’t sign an agreement that will make us slaves to foreigners; that will enslave us for 30-40 years,” Mathira MP Rigathi Gachagua opined.

According to Treasury, as at December last year, the public debt stood at a shocking Ksh.5.3 trillion, with that amount expected to hit a record high Ksh.6.3 trillion by next year.

With China being the top lender, the Kenyan taxpayers are sweating to repay the Chinese government Ksh.637 billion with interests accrued.

Kenya owes Japan and France a staggering Ksh.166 billion, with that amount even higher when all the interests are accumulated.

This even as Germany, Italy, Belgium, USA and Finland are all training their eyes on Kenyan taxpayers to pay back their Ksh.63 billion.

Already, the government has listed three non-performing loans including Ksh.7.9 billion by the State Broadcaster KBC, Tana & Athi Rivers Development Authority’s Ksh.1.2 billion loan as well as the East African Portland Cement that has a loan of Ksh.1.5 billion.

These institutions now stand at a risk of facing auction should the government fail pay back the various debts.